British Pound Crosses Forming Lows

It is possible that the GBPCHF has formed a significant low.  A number of signs point to a rally attempt, including a potential inverse head and shoulders pattern and the fact that the last leg of the decline was from a triangle.  Moves from triangles are terminal, meaning that they complete a larger pattern (in this case a 5th wave).

The GBPCAD has built a base to rally from and eventually test 1.9260.  A break through there would shift focus to 1.96, which is the 61.8% of the drop from 2.0750.  1.7890 needs to hold in order for this bullish outlook to remain favored.   

The long term trend is considered down as long as price is below 2.4353.  The spike high to 2.7110 in early October probably completes wave B of a long term A-B-C decline that began in 2001.  The minimum long term target is below 2.0291.  Favor the downside as long as price is below the resistance line that has held since October 8.  Resistance is reinforced from the December 5 high at 2.3161.

There is support around 2.70 for the GBPNZD.  This level is former support as well as former resistance (circled).  RSI on intraday charts has hovered near oversold for most of December and the indicator has turned up.  The evidence points to strength going forward and a test of the short term resistance line near 2.80.  

Jamie Saettele writes Forex Technicals: The Day Ahead, Monday-Thursday (published at 6 pm EST), Daily Technicals  every weekday morning (9 am EST), COT Analysis (published Monday mornings), and analysis of currency crosses throughout the week.  He is also the author of Sentiment in the Forex Market.